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Rock and roll bands, (in)complete contracts and creativity

Author

Listed:
  • CEULEMANS, Cédric

    (Université Libre de Bruxelles, ECARES, B-1050 Brussels, Belgium)

  • GINSBURGH, Victor

    (Université Libre de Bruxelles, ECARES, B-1050 Brussels, Belgium and Université catholique de Louvain, CORE, B-1348 Louvain-la-Neuve, Belgium)

  • LEGROS, Patrick

    (Université Libre de Bruxelles, ECARES, B-1050 Brussels, Belgium)

Abstract

Members of a rock and roll band are endowed with different creativity. They match and eventually obtain credit for song writing as well as a share of the returns from sales. More creative members increase the probability of success but may also claim a larger share of the pie. In our theoretical model, the nature of matching (postive or negative assortative) as well as the covariation between the probability of having a “hit” and the dispersion of credits given to individual members are a function of the completeness of contracting. When members adopt a “gentleman’s agreement” to share credits equally, the covariation between the probability of a hit and the dispersion of credits is negative, which is the consequence of positive assortative matching in creativity. The data show that the relation between dispersion and success is significantly negative, and that rock bands are thus likely to sign incomplete contracts.

Suggested Citation

  • CEULEMANS, Cédric & GINSBURGH, Victor & LEGROS, Patrick, 2010. "Rock and roll bands, (in)complete contracts and creativity," CORE Discussion Papers 2010074, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  • Handle: RePEc:cor:louvco:2010074
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    File URL: http://www.uclouvain.be/cps/ucl/doc/core/documents/coredp2010_74web.pdf
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    References listed on IDEAS

    as
    1. Jean-Charles Rochet & Jean Tirole, 2014. "Platform Competition in Two-Sided Markets," CPI Journal, Competition Policy International, vol. 10.
    2. Simon P. Anderson & Stephen Coate, 2005. "Market Provision of Broadcasting: A Welfare Analysis," Review of Economic Studies, Oxford University Press, vol. 72(4), pages 947-972.
    3. Wright, Julian, 2003. "Optimal card payment systems," European Economic Review, Elsevier, vol. 47(4), pages 587-612, August.
    4. Jeffrey Church & Ian King, 1993. "Bilingualism and Network Externalities," Canadian Journal of Economics, Canadian Economics Association, vol. 26(2), pages 337-345, May.
    5. Volker Nocke & Martin Peitz & Konrad Stahl, 2007. "Platform Ownership," Journal of the European Economic Association, MIT Press, pages 1130-1160.
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    Cited by:

    1. Ronnie J. Phillips & Ian C. Strachan, 2016. "Breaking up is hard to do: the resilience of the rock group as an organizational form for creating music," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, pages 29-74.

    More about this item

    Keywords

    overlapping generations; resource management; common pool resource; spatial interdependence; strategic behaviour; cooperative behaviour;

    JEL classification:

    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • K11 - Law and Economics - - Basic Areas of Law - - - Property Law
    • Q20 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - General

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